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The power of attorney document is a must-have part of any estate plan. The better you understand your power of attorney document, the easier it will be to plan for your future.
What Is a Power of Attorney Document?
This document answers the question of who you would like to represent you in business, healthcare, and personal financial matters if you cannot decide for yourself. Most people don’t like to think about being seriously injured and unable to care for themselves. However, as you get older, this becomes a real possibility.
If your health fails, you might not be able to make financial decisions independently. For this reason, a power of attorney directive is an essential document to prepare in advance. There are several law firms like LegalShield whose legal services focus on helping people prepare their POAs.
The power of attorney is a declaration that you prepare. It appoints someone else to make decisions for you and to act on your behalf if you are incapacitated. In most cases, people choose an adult child or their spouse to take on these responsibilities. Power of attorney documents gives you peace of mind. You know that whatever happens, someone you trust and care for will be making decisions for you if you can’t make them for yourself.
Different Types of Power of Attorney Documents
When you prepare a limited power of attorney, it is your job to decide which powers your selected agent or agents will have on your behalf. A power of attorney document will often grant one person several powers. However, you could choose to limit specific responsibilities to certain individuals. This document is called a limited power of attorney.
The full power of attorney gives one person over-arcing decision-making power. They decide your healthcare, business, and personal financial issues. This form of POA is the most commonly used in conjunction with estate planning.
Even after death, a durable power of attorney stays in effect. The full and limited power of attorneys can become void for several reasons. You can revoke the POA, you can become mentally incompetent or die, or the POA could have an expiration date.
Using a Full and Limited POA
Limited power of attorney may be used to keep personal and business finances separately. You may want your children to make medical decisions for you, but you want your spouse to handle your business.
Or you might have an adult child who lives next door, so they would be the one to make medical decisions. However, an adult child that lives across the country may be the one who is best suited to handle business decisions.
Full power of attorney is simple. It gives one person broad decision-making power. This is beneficial if you don’t have an extensive, complicated business financial portfolio or multiple children.
A durable power of attorney is beneficial if you get into a car accident and you are in a coma. With a DPA, your representative will have the ability to make decisions on your behalf.
Keep Your POA Up to Date
You can alter or revoke your POA at any time. Regularly review your estate and keep your power of attorney of documents up to date so that they reflect your desires.